Lafarge has released its results for 3Q14. EBITDA fell by 4% to €887 million as it was negatively affected by exchange rates. However, when this is excluded, EBITDA improved by 2% like-for-like. Consolidated sales were down by 2% to €3.636 billion, but increased by 2% like-for-like excluding the impact of exchange rates.
Approximately 31 million t of cement was sold in 3Q14, up 1% at constant scope. Total sales volumes were boosted by growth in the US, greater volumes in Egypt as the company gradually implements its fuel diversification strategy, in addition to the start-up of plants in Rajasthan, India, and Moscow, Russia. These improvements were offset somewhat by continuing declines in France’s construction sector and by difficulties in transporting cement in Iraq due to the current situation in the country.
Sales volumes of ready-mix concrete (7.1 million m3) and aggregates (50.4 million t) were down, falling by 2% and 4%, respectively, on a like-for-like basis. These declines have been attributed to weakened construction activity in France and lower demand in Western Canada when compared to 3Q13, following the completion of several big infrastructure projects.
On a regional basis, EBITDA decreased like-for-like in Western Europe (-10%), Latin America (-1%) and Asia (-15%) in 3Q14. North America, Central and Eastern Europe, and Middle East and Africa demonstrated growth, with EBITDA rising by 9%, 5% and 4%, respectively.
Meanwhile, cost cutting and innovation measures generated €75 million and €60 million in 3Q14, respectively. In January – September 2014, these measures generated €425 million.
Thus far in 2014, Lafarge has received €1.4 billion in divestment proceeds. Lafarge received €101 million in cash for divestments in 3Q14. A further €0.9 billion is due, mainly in 4Q14. Lafarge invested €334 million in the quarter, which went towards:
- Sustaining capital expenditures (€98 million).
- Development investments and acquisitions (€236 million). This included investment in projects at the Exshaw plant in Canada and the Ravena plant in the US, as well as a number of debottlenecking projects, primarily in Sub-Saharan Africa.
Operating income came in at €676 million in 3Q14, down 5% but up 2% on a like-for-like basis. Net result Group share declined by 28%. When adjusted for one-time gains on divestments and merger-related costs, however, net income is stable. Net debt decreased by 1% when compared with the corresponding quarter in 2013.
“In a quarter marked by more moderate growth, we continued to progress on implementing our actions to reduce debt, cut costs and promote innovation,” said Bruno Lafont, Chairman and Chief Executive Officer of Lafarge. “Our management is fully focused on our day to day business and on achieving our objectives. We shall meet our 2014 €600 million cost cutting and innovation target, and confirm our 2015 €550 million objective.”
“We are making swift progress on our planned merger with Holcim with a dedicated project team. We have taken decisive steps towards the completion of this transformational move. Given the headway made on the divestment, regulatory and integration processes, we are confident, as announced, that we will complete the merger in the first half of 2015,” added Lafont.
Adapted from press release by Louise Fordham
Read the article online at: https://www.worldcement.com/europe-cis/06112014/lafarge-3q14-results-highlights-806/